[Congressional Record Volume 148, Number 119 (Thursday, September 19, 2002)]
[Senate]
[Pages S8899-S8901]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNANIMOUS CONSENT REQUEST--S. 2734
Mr. KERRY. Mr. President, I am going to be asking unanimous consent
to proceed forward on the bill, but I am not going to do that until
someone is here from the other side. And I know they are going to
object, or most likely will object.
But let me bring to the attention of my colleagues in the Senate a
situation that is not dissimilar to a situation we faced some months
ago in trying to provide emergency assistance, under the Small Business
Administration, to those who had been affected by the events of
September 11 of last year.
We had a lot of small businesses in the country that were hurting
that had collateral damage, if you will, as a consequence of those
events. Many, many small businesses were dependent on the economy as it
flows through all sectors. So whether it was a small drycleaner that
was affected because they were not doing as much business because
hotels were not doing as much business or a limousine company or a taxi
company, there are many people who were affected tangentially because
of the dropoff in air travel, and so forth.
It took us a number of months, almost six, unfortunately, in the
Senate to respond in a way that many of us thought was both appropriate
and adequate. And, again, we are sort of running into a strange kind of
unexplained resistance by the administration to something that makes
common sense, is very inexpensive but also very necessary for a lot of
small entrepreneurs in our country. I am specifically referring to the
Small Business Drought Relief Act.
In more than 30 States in our country, we have a declared drought
emergency. And the drought is as significant in some places as it was
during the great Dust Bowl years of the Depression in the United
States.
Drought hurts more than farmers, more than ranchers. The purpose of
this bill is to try to provide some emergency assistance, in an
affordable and sensible way, for those small businesses that are not in
agricultural-related fields but desperately cannot get help, and need
it, and cannot get it because the SBA does not apply the law uniformly
for all victims of drought.
The SBA makes disaster loans to small businesses related to
agriculture that are hurt by drought, but they are turning away small
businesses that are in industries unrelated to agriculture, and
claiming that those businesses are not entitled to it because drought
does not fit the definition of disaster.
That is just wrong. It is wrong because the law does not restrict
them from making loans to those small businesses. It is wrong because
that is not the intent of the Congress to turn away those small
businesses, and they should be following the law and following the
intent of Congress.
I might add that the SBA has in effect right now disaster
declarations in 30 States that I just talked about. For instance, in
South Carolina, the entire State has been declared a disaster by the
SBA, but the administration is not helping all of the drought victims
in South Carolina that are looking for help.
Let me share with you the declaration of drought itself. It addresses
this question of intent.
Small businesses located in all 46 counties may apply for
economic injury disaster loan assistance through the SBA.
Let me read to you from the declaration:
Small businesses located in all 46 counties may apply for
economic injury disaster loan assistance through the SBA.
These are working capital loans to help the business continue
to meet its obligations until the business returns to normal
conditions. . . . Only small, non-farm agriculture dependent
and small agricultural cooperatives are eligible to apply for
assistance. Nurseries are also eligible for economic injury
caused by drought conditions.
What do I mean by other businesses that may be affected by drought?
In South Carolina, conditions are so bad that small businesses
dependent on lake and river tourism have seen their revenues drop
anywhere from 17 to 80 percent. So you have victims of the drought that
range from fish and tackle shops to rafting businesses, from
restaurants to motels, from marinas to gas stations. Their livelihood
is no less impacted and no less important than those who have been
deemed to fit under only the agricultural definition.
Thousands of small businesses make their living in tourism,
recreation industries, not just in South Carolina but in many other
parts of the country, including my State of Massachusetts, in Texas,
Michigan, Delaware, and elsewhere.
In fact, for a lot of States around the Great Lakes Basin, sport
fishing, as reported by the Committee on Small Business and
Entrepreneurship, brings into the region some $4 billion a year. There
are many industries that are dependent on water that are affected by
drought, and they ought to be eligible for this help.
Is this opening Pandora's box with respect to a flow of lending that
we cannot afford? The answer is definitively no. The SBA already has
the authority, but its lawyers have decided not to help these
industries based on their own interpretation of a definition, despite
the fact that Congress believes otherwise.
That defies both common sense and fairness. Small businesses with
everything on the line desperately need this,
[[Page S8900]]
especially at a time when capital is a lot tighter for working capital
purposes, where the lending is significantly tighter from the banks and
from other traditional credit sources.
Our bill, the drought relief bill, does not expand the existing
program. It simply clarifies existing authority. That is a matter of
common sense.
In terms of cost, the Congressional Budget Office estimates a cost of
about $5 million annually. What we have here is a resistance by
somebody in the U.S. Senate to allowing this to go forward based on
about a $5 million annual estimate by CBO.
This chart of CBO's estimate is a tally of the estimated spending
under the SBA's disaster loan program which shows the differential with
this particular bill.
This bill is bipartisan. The principal cosponsors are Senator Bond
and Senator Hollings. All the members of our committee--the Committee
on Small Business and Entrepreneurship--voted in favor of this bill.
There are 25 cosponsors, Democrats and Republicans; 17 Governors have
written us to express their support of this legislation in hopes we
will pass it, including 15 of the Southern Governors' Association.
I ask unanimous consent that letter, and others, be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Southern Governors' Association,
Washington, DC, August 19, 2002.
Hon. John Kerry,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator Kerry: We are deeply concerned that small
businesses in states experiencing drought are being
devastated by drought conditions that are expected to
continue through the end of the summer. We urge you to
support legislation that would allow small businesses to
protect themselves against the detrimental effects of
drought.
Much like other natural disasters, the effects of drought
on local economies can be crippling. Farmers and farm-related
businesses can turn in times of drought to the U.S.
Department of Agriculture. However, non-farm small businesses
have nowhere to go, not even the Small Business
Administration (SBA), because their disaster loans are not
made available for damage due to drought.
To remedy this omission, Sen. John Kerry (D-Mass.)
introduced the Small Business Drought Relief Act (S. 2734) on
July 16, 2002, to make SBA disaster loans available to those
small businesses debilitated by long drought conditions. This
bill was passed by the Senate Small Business Committee just
eight days later. Also, the companion legislation (H.R. 5197)
was introduced by Rep. Jim DeMint (R-S.C.) on July 24, 2002.
Both bills are gaining bipartisan support, and we hope you
will cosponsor this important legislation and push for its
rapid enactment in the 107th Congress.
As 11 southern states are presently experiencing moderate
to exceptional drought conditions this summer, we cannot
afford to wait to act. We urge you to cosponsor the Small
Business Drought Relief Act and push for its consideration as
soon as possible.
Sincerely,
Gov. Don Siegelman of Alabama, Gov. Mike Huckabee of
Arkansas, Gov. Roy E. Barnes of Georgia, Gov. Paul E.
Patton of Kentucky, Gov. M.J. ``Mike'' Foster, Jr. of
Louisiana, Gov. Parris N. Glendening of Maryland, Gov.
Ronnie Musgrove of Mississippi, Gov. Bob Holden of
Missouri, Gov. Michael F. Easley of North Carolina,
Gov. Frank Keating of Oklahoma, Gov. Jim Hodges of
South Carolina, Gov. Don Sundquist of Tennessee, Gov.
Rick Perry of Texas, Gov. Mark Warner of Virginia, Gov.
Bob Wise of West Virginia.
____
State of South Carolina,
Office of the Governor,
Columbia, SC, July 9, 2002.
Hon. John Kerry,
U.S. Senate,
Washington, DC.
Dear Senator Kerry: The State of South Carolina is in its
fifth year of drought status, the worst in over fifty years.
Some parts of the state are in extreme drought status and the
rest is in severe drought status.
99% of our streams are flowing at less than 10% of their
average flow for this time of year. 60% of those same streams
are running at lowest flow on record for this date. The
levels of South Carolina's lakes have dropped anywhere from
five feet to twenty feet. Some lakes have experienced a drop
in water level so significant that tourist and recreational
use has diminished.
State and national climatologists are not hopeful that we
will receive any significant rainfall in the near future. To
end our current drought, we would need an extended period of
average to above average rainfall.
Droughts, particularly prolonged ones such as we are
experiencing now, have extensive economic effects. For
farmers who experience the economic effects of such a
drought, assistance is available through the USDA. For small
businesses, assistance is available only for agriculture
related small businesses, i.e. feed and seed stores. For
businesses that are based on tourism around Lakes and Rivers,
there is currently no assistance available.
We have reports of lake and river tourism dependent
businesses experiencing 17% to 80% declines in revenue. The
average decline in revenue is probably near 50% across the
board.
My staff has contacted Small Business Administration and
they are not authorized to offer assistance to these
businesses because a drought is not defined as a sudden
occurrence. Nonetheless, a drought is an ongoing natural
disaster that is causing great economic damage to these small
business owners.
I am requesting that you assist us in this situation by
proposing that the Small Business and Entrepreneurship
Committee take action to at least temporarily amend the SBA
authorizing language and allow them to offer assistance to
small businesses affected by prolonged drought. This would
allow Governors to ask SBA for an administrative declaration
of economic injury because of drought. The low interest loans
SBA can offer these businesses would allow many of them to
weather the drought and remain in business for the long run.
My staff has also been in contact with Senator Hollings'
legislative staff. I hope together, we can find an expedient
solution to the plight of these small business owners. Short
of finding a way to control the weather, this may be our only
option to help their dire situation.
Sincerely,
Jim Hodges,
Governor.
____
State of North Carolina,
Office of the Governor,
Raleigh, NC, July 18, 2002.
Hon. Jesse Helms,
U.S. Senate,
Washington, DC.
Dear Senator Helms: I am writing to urge your support for
legislation recently introduced in the Senate to add drought
as a condition for which small businesses may apply for Small
Business Administration Economic Injury Disaster Loans.
The Small Business Drought Relief Act (S. 2734) will
correct the current situation facing our small businesses in
North Carolina. SBA disaster assistance is not available
despite a historic drought that is impacting not just our
agriculture sector, but causing real business and revenue
losses, which threaten some firms with job layoffs or even
bankruptcy.
These businesses need help, and access to low-interest SBA
loans can offer a lifeline to allow paying bills and making
payrolls until business returns to normal.
I urge you to push for rapid action on this important
enhancement to SBA's ability to help our people through this
time of trouble.
With kindest regards, I remain
Very truly yours,
Michael F. Easley,
Governor.
____
State of North Carolina,
Office of the Governor,
Raleigh, NC, July 18, 2002.
Hon. John Edwards,
U.S. Senate,
Washington, DC.
Dear Senator Edwards: I am writing to thank you for your
support for legislation introduced in the Senate to add
drought as a condition for which small businesses may apply
for Small Business Administration Economic Injury Disaster
Loans.
The Small Business Drought Relief Act (S. 2734) will
correct the current situation facing our small businesses in
North Carolina. SBA disaster assistance is not available
despite a historic drought that is impacting not just our
agriculture sector, but causing real business and revenue
losses, which threaten some firms with job layoffs or even
bankruptcy.
These businesses need help, and access to low-interest SBA
loans can offer a lifeline to allow paying bills and making
payrolls until business returns to normal.
I urge you to push for rapid action on this important
enhancement to SBA's ability to help our people through this
time of trouble.
With kindest regards, I remain
Very truly yours,
Michael F. Easley,
Governor.
____
Office of the Governor,
July 23, 2002.
Hon. John F. Kerry,
Chairman, Committee on Small Business, Washington, DC.
Hon. Christopher Bond,
Ranking Member,
Washington, DC.
Dear Senators Kerry and Bond: Much of Nevada and the Nation
have been experiencing extreme drought over the past several
years. In Nevada we have seen the effects of this situation
through catastrophic range and forest fires, insect
infestations and loss of crops and livestock.
Prolonged drought causes a drastic reduction in stream and
river flow levels. This can cause the level of lakes to drop
so significantly that existing docks and boat ramps cannot
provide access to boats. In the case of range and forest
fires we have seen small innkeepers and hunting and fishing
related
[[Page S8901]]
businesses that have their entire season wiped out in a
matter of a few hours.
Unfortunately for some small businesses, drought assistance
is available only for agriculture related small businesses,
such as feed and seed stores. For businesses that are based
on tourism around lakes and rivers, there is currently no
drought assistance available.
The Small Business Administration (SBA) is not currently
authorized to help these businesses because a drought is not
a sudden occurrence. Nonetheless, a drought is an ongoing
natural disaster that causes great damage to these small
businesses.
I would like to lend my support to S. 2734, The Small
Business Drought Relief Act. This bill would amend the
guidelines and authorize the SBA to offer assistance to small
businesses affected by prolonged drought. With passage of
this bill, Governors would be allowed to ask SBA for
administrative declarations of economic injury because of
drought. The low interest loans SBA can offer these
businesses would allow many of them to weather the drought
and remain economically viable for future operation.
Sincerely,
Kenny C. Guinn,
Governor.
____
Commonwealth of Kentucky,
Office of the Governor,
Frankfort, KY, July 23, 2002.
Hon. John F. Kerry,
Chairman, Committee on Small Business and Entrepreneurship,
U.S. Senate,
Washington, DC.
Hon. Christopher S. ``Kit'' Bond,
Ranking Member, Committee on Small Business and
Entrepreneurship, U.S. Senate,
Washington, DC.
Dear Chairman Kerry and Senator Bond: As you know, much of
our nation is struggling to overcome ``moderate'' to
``extreme'' drought conditions. Droughts, especially
prolonged droughts, have extensive, devastating effects that
damage crops and livestock, deteriorate soil, and fuel raging
wildfires. These are only some of the irreparable effects
that droughts can have on small businesses, communities, and
state and local economies.
In general, federal disaster assistance is available for
agriculture and agriculture-related small businesses that are
impacted by drought. However, droughts hurt more than
agricultural, forestry, and livestock businesses.
Prolonged drought also causes a drastic reduction in stream
and river flow levels. This can trigger such a significant
drop in the level of lakes that existing docks and boat ramps
cannot provide access to boats, which impacts many additional
small businesses.
As a result, many non-farm small businesses that are water-
reliant also suffer staggering revenue losses in the wake of
a drought disaster, yet they do not currently receive
disaster relief. Unlike other natural disasters such as
hurricanes or floods, the effects of drought build up over-
time, last for several years, and are jeopardizing the future
of these small business owners. The lack of federal disaster
assistance available to these non-farm small businesses only
forces undue job layoffs and bankruptcies and further
disrupts drought-impacted communities.
I thank you for recognizing that many fish and tackle
shops, rafting businesses, restaurants, motels, camp grounds,
marinas, gas stations, and other small businesses in Kentucky
and other states are severely impacted by drought but are
unable to receive federal disaster assistance. I strongly
support your resulting efforts, the Small Business Drought
Relief Act (S. 2734), which would allow the Small Business
Administration to offer low-interest disaster loans to these
businesses and afford them the same opportunity as
agriculture-related businesses to recover and survive.
I appreciate your assistance and support and look forward
to working with you and your colleagues on this very
important matter.
Sincerely,
Paul E. Patton,
Governor.
Mr. KERRY. This is a letter from the Southern Governors' Association,
with 15 southern Governors signing and asking us to pass this
assistance. They have sent letters to Members of Congress asking them
to support and pass the bill.
Finally, we are not talking about grants. We are talking about loans.
These are going to be repaid. The default record of the SBA over the
last 10 years is really quite extraordinary on the positive side of the
ledger. The question is whether we are going to look to small
businesses that are equally hard working as anyone else in the country,
who, like farmers, are suffering the economic consequences of a drought
that is beyond their control.
I thank Senator Bond for working with me to try to address this
problem. I thank Senator Hollings, particularly, the chairman of the
Commerce Committee, for introducing the bill with me. I am particularly
grateful to the small business owners who have brought this issue to
our attention and who hope we can break out of any partisan resistance
within the Senate in order to do what is right.
I hope my colleagues will permit us to proceed forward on this
legislation.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. KERRY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KERRY. Mr. President, I ask unanimous consent that the Senate
proceed to consideration of Calendar No. 535, S. 2734; and that the
Bond amendment, which is at the desk, be considered and agreed to; the
committee-reported substitute amendment, as amended, be considered and
agreed to; the bill, as amended, be read three times, passed, and the
motion to reconsider be laid upon the table; that any statements
relating thereto be printed in the Record at the appropriate place as
if read, without further intervening business or debate.
The PRESIDING OFFICER. Is there objection?
Mr. SANTORUM. Mr. President, I object.
The PRESIDING OFFICER. Objection is heard.
Mr. KERRY. Mr. President, my hope is, again, that Senators on the
other side, who are also cosponsors of this bill, will assist us in
trying to proceed forward because there is no rationale for delay--I
underscore--there was an e-mail circulated by somebody with some
gargantuan unofficial estimate of cost that has no relationship to any
legitimate estimate that has been made here. The CBO estimate clearly
demonstrates that this measure is sensible, with a cost of about $5
million a year.
What is happening is we are seeing a little bit of partisanship--
maybe we are seeing a lot of it these last days here in the Senate. I
hope we can overcome this in the next days. I look forward to working
with Senator Bond and others to see if we can proceed forward on this
legislation.
I yield the floor.
____________________